• The USD and world equity markets rose as investors were cheered by a strong showing by Joe Biden in the U.S. Democratic presidential primaries, though an economy-weakening coronavirus outbreak kept investors on tenterhooks, with bond yields falling.

• Wall Street surged, with healthcare stocks providing the biggest boost after Joe Biden overtook Bernie Sanders to become the new front-runner in the race for the Democratic presidential nomination. Dow Jones was up 3.41% at 26,801, S&P 500 up 3.04% at 3,094, Nasdaq up 2.80% at 8,834.

• U.S. services sector activity jumped to a one-year high in February, suggesting strength in the economy before a recent escalation of recession fears ignited by the coronavirus epidemic that prompted an emergency interest rate cut from the Federal Reserve. The Institute for Supply Management (ISM) said its non-manufacturing activity index increased to a reading of 57.3 last month, the highest level since February 2019, from 55.5 in January. Economists polled by Reuters had forecast the index falling to a reading of 54.9 in February.

• The ADP National Employment Report showed private payrolls gained 183,000 jobs last month after rising by a downwardly revised 209,000 in January. Economists had forecast private payrolls increasing 170,000 in February following the previously reported 291,000 surge in January.

• The Bank of Canada, taking its cue from other central banks, lowering its benchmark overnight rate to 1.25% from 1.75%, prompting money markets to price in a better than even chance of another reduction next month. The Bank of Canada said the outbreak was "a material negative shock" to the Canadian and global outlooks and predicted that as it spread, business and consumer confidence would deteriorate, further depressing economic activity.

CURRENCIES

• The USD climbed against a basket of currencies – DXY index was 0.18% higher at 97.33. The index slipped as low as 96.926 on Tuesday, its weakest since Jan. 8.

• EUR fell lower after etching a 1.1186 high down towards 1.1093.

• GBP bounced higher from 1.2768 up towards 1.2871.

• China's yuan finished domestic trading at a six-week high – CNY ended onshore trading at 6.9244, up more than 0.6% on the day and its strongest close since Jan. 23

• USDJPY was locked in between 107.15 / 107.65 in the overnight session.

• NZD remained steady, breaking through 0.6300 once again to a 0.6304 high and closed at 0.6288.

• AUDNZD remained on a high, breaking topside resistance at 1.0500 to see a 1.0530 high.

• AUDEUR continued to climb higher, making gains up towards 0.5960 but settling at 0.5943.

TREASURIES

• U.S. benchmark Treasury 10-year yields largely hovered just below 1%, as the bond market continued to digest the Federal Reserve's recent rate cut in response to the economic fallout from the rapidly spreading coronavirus.

• The yield curve continued to steepen, with the spread between the two-year and 10-year widening to 34.40 basis points from 29.8 basis points on Tuesday.

• U.S. 10-year yields fell to 0.93%, from 1.017% late on Tuesday. However a late push higher in NY close saw it up towards 1.04%.

• Yields on U.S. 30-year bonds were at 1.642%, up from 1.6302% on Tuesday. They touched an all-time trough of 1.507% the day before.

• U.S. two-year yields fell to 0.613% from Tuesday's 0.729% but closed up at 0.673%.

COMMODITIES

• Gold held steady following a sharp rise in the previous session - Spot gold was up 0.3% at $1,649 per ounce but edged off the highs to settle $1,637.

• Chinese iron ore futures rebounded to close higher for a third straight session on optimism that further policy support will be rolled out to minimize the economic fallout from a global coronavirus outbreak. Spot iron ore prices jumped to one-week highs on Tuesday, with the benchmark 62% grade settling at $89 a tonne, supported by stockpiling by some steel mills.

• Copper prices climbed as traders interpreted the U.S. central bank's rate cut as a positive move that will ease liquidity, but worries about demand in top consumer China dominated. Benchmark LME copper ended up 0.3% at $5,684 a tonne.

• Crude oil prices were mixed, giving up early gains despite expectations that major producers were closing in on an agreement to cut supply aimed at offsetting a slump in demand caused by the coronavirus outbreak. Brent crude futures were down 26 cents at $51.60 a barrel after hitting $53.03. U.S. West Texas Intermediate (WTI) was up 2 cents to $47.22 a barrel.

AUD remained firm overnight, even though the USD climbed higher, climbing up towards 0.6628 and remaining above 0.6600 supports.

Commodities were buoyed in early NY with stock markets rallying and risk trades remaining upbeat. JPY sales lifted AUDJPY above 71.30 which buoyed the AUD. The Fed remains widely expected to cut rates again however RBA cuts are likely limited which is having an impact on AU-US spreads tightening.

Today we have limited data out in Australia with the only release being the January trade balance data. Overnight data will concentrate on the U.S.

AUD remains well supported after key central bank interest rate cuts around the world and positive GDP readings yesterday. Momentum seems to have turned with AUD buying likely to continue.

Key for further AUD upside momentum will be a break of 0.6645/0.6650 which may see further induced buying as a result.

TECHNICAL OUTLOOK

AUD - lack of pull back is encouraging for longs. AUD holds between 0.6600/30 during NY, gains being consolidated.